Rethinking Foreclosures

It seems everyone believes the infomercials that foreclosed houses can be purchased for 1/2 of what they are worth. It may be time to come out of the clouds and reconsider that type of thinking. If you owned a house that is worth $200,000 and you owe $50,000, or even $150,000, would you let the bank repossess that house? Probably not. Most people with a bit of sense would sell the house at even the $150,000 price and come out even before they would do years of damage to their credit. Yet the buyer would still consider themselves to have done well in the purchase, a $200,000 house for $150,000, what a deal. Thanks to the folks who want to sell their latest course on “How to Make a Fortune in Foreclosed Properties” there are, usually reasonable, people who think the 1/2 price house is out there. Consider the houses that are really being foreclosed. The truth of the matter is, these are the houses that are worth $150,000 but the owner has a mortgage of $200,000. Or they are the houses that will be worth $150,000 once the $75,000 worth of updating and pier work is completed. Or they are the houses that are worth $150,000 in another part of the city, but the houses in their immediate neighborhood are worth $75,000. Remember, there are two factors in the value of a home, condition and, repeat with me… location, location, location. The Tulsa area has been declared by the Tulsa World as being the 6th best real estate market in the country. That makes Tulsa a great location. So, do you really believe you are going to get a house for 1/2 its value? Really??

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